Dubai: Declining oil prices and slower economic growth in the Middle East has forced research firm International Data Corporation (IDC) to revise its information and communications technology (ICT) spending forecast for this year.
The Middle East’s ICT spending forecast for 2016 is expected to grow by 2.17 per cent to $103.6 from $101.4 billion last year, driven by packaged software and IT services.
“Slower economic growth is projected in many of the countries and lower oil prices. The initial expectations for the growth were around five per cent as number of projects are expected to be delayed in terms of overall ICT investments and weaker consumer sentiment,” said Jyoti Lalchandani, IDC’s group vice-president and regional managing director for the Middle East, Africa, and Turkey.
He gave an insight into the challenges that the region’s organisations are facing as the emergence of digital transformation disrupts the customers, business models, and industries that they had previously taken for granted, ahead of the IDC Middle East CIO Summit to be held in Abu Dhabi on February 16 and 17.
“The Middle East is increasingly being exposed to a new wave of disruptive technologies that present incredible opportunities to drive innovation and value creation across all facets of the organisation,” Lalchandani said.
He believes that the single most important competency required to thrive in this new digital economy is the ability to rapidly respond to changing conditions within the ecosystem in which the organisation resides.
The ultimate aim must be to deliver a “compelling customer experience” that seamlessly blends the digital and the physical worlds, but success in this regard will only come with a whole new level of enterprise-wide collaboration that encompasses the entire value chain.
The regional IT spending, excluding telecom services, is forecast to grow by 3.1 per cent to $44.3 billion this year from $42.9 billion last year.
On the enterprise side, he said that chief information officers are taking a cautious view on spending and are reprioritising number of investments. In the telecom services areas, the growth is predominantly driven by mobile data services.
He said that investments are going to drive third platform — cloud, mobile, social and big data and analytics. Some of the innovations built on this third platform technologies are wearables, 3D printing, virtual reality and drones.
By 2018, at least half of IT spending will be cloud based, reaching 60 per cent of all IT infrastructure and 60-70 per cent of all software services, and technology spending by 2020.
IDC sees IT security as the fastest growing segment in the industry, growing 12-15 per cent annually and stays at the top if IT initiatives.
By 2020, he said that over 1.5 billion people are affected by data hacks. Security is moving to the cloud and over 60 per cent if Web security software is cloud-based.
“More than 50 per cent of mobile devices will be accessed biometrically. Cost optimisation and lack of skills will drive demand for security services,” he said.
Stephen Brennan, senior vice-president of Cyber Network Defence at DarkMatter said that security should be at the “forefront and part of our DNA”.
He said that limited stealth operations allow organisations of all sizes to bolster their risk management programmes by enriching security data with data derived directly from the sources of risk.